Economics at your fingertips  

On the Impact of Input Prices on an Entrant’s Profit Under Multi-Product Competition

Duarte Brito and Markos Tselekounis ()

Review of Industrial Organization, 2017, vol. 50, issue 1, No 6, 105-125

Abstract: Abstract We study the impact of input prices on an entrant’s profit when firms are engaged in multi-product competition. We consider a setting with both horizontal and vertical differentiation, in which a vertically integrated firm controls the input that is required for the supply of the high-quality product. We establish the conditions under which the entrant is better off from an increase in the wholesale price of this critical input. This possibility contrasts with the existing literature that, under linear demands, finds a non-positive relationship between the input price and the single-product entrant’s profit.

Keywords: Input prices; Multi-product competition; Vertical differentiation (search for similar items in EconPapers)
JEL-codes: L13 L97 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2

DOI: 10.1007/s11151-016-9531-2

Access Statistics for this article

Review of Industrial Organization is currently edited by L.J. White

More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2020-07-24
Handle: RePEc:kap:revind:v:50:y:2017:i:1:d:10.1007_s11151-016-9531-2